If you are getting ready to purchase a home, whether new or used, before you sign on the dotted line, I recommend that you get a home inspection. Getting a home inspection can keep you from making a home purchase that you will regret later on down the road.
I just had a home inspection save me from making a home purchase that would eventually cause me many headaches and cost me thousands of dollars. I'd been searching for the past few years to find another property to add to my investment portfolio. Remember that investment property I found for such a great price? I thought I'd found the perfect combination of a low-priced property that only needed minimal cosmetic repairs in order to get the house ready to be rented.
I had the home inspected Friday by a licensed home inspector and the results were very disheartening. The house I thought only needed minor cosmetic repairs has major structural issues; specifically, the foundation of the house. Within minutes, the inspector found that the foundation walls have shifted and part of the house is not even attached to the foundation. He took me in the crawlspace and showed me where you could look through at the foundation wall and see daylight. One section was so bad, you could see the cars passing in front of the house. Anyone who didn't know what to look for would not have been able to notice how bad the damage is to the foundation. The inspector estimated that the cost to repair the foundation correctly would be about $25-30k. Right off the bat, the foundation repair would cost me as much as the price of the house.
The other major issue that I didn't know about and wouldn't have known about without an inspection is that the electrical system in the home is not up to code. The power was on and all the lights seemed to work properly so I thought it was ok. The inspector had some kind of nifty little gadget that he plugged into the outlets and determined that there were “open hot's” on all of the outlets. In layman's terms, if this was not corrected by a licensed electrician, the outlets could cause an electrical fire.
The repair cost continued to grow as we went outside to the exterior of the home. I knew the roof would eventually need to be replaced since it looked like the shingles were pretty old. The inspector looked at the roof and advised not only does the roof need to be replaced ASAP, the roof had no flashing so water basically sits on the roof. An inspection of the attic also revealed several boards that need to be replaced due to water damage.
The inspector could see the disappointment on my face and tried to make me feel better. He told me that there are houses out there that can be had for a good price and only need cosmetic repairs. His exact words to me about this house were, “I'm not telling you not to buy the house, but if it were me or any of the many investors I work with, we would be asking for our earnest money back from the seller”.
So there you have it, I'm still on the hunt for my next investment property. I'm out of the $250 bucks I paid for the inspection but that $250 saved me thousands of dollars. I called the realtor and explained the issues and told him I would be withdrawing my offer. He emailed me the termination agreement and advised the $2500 earnest money I submitted will be sent back to me.
Image Credit: tholland